Prices still sliding

The renewed downward trend in house prices continued towards the

end of last year, with prices on the 20-City Case-Shiller index falling for the fifth

month in a row in November. (See Chart below.) Prices on the alternative FHFA

index were stable. Nonetheless, in some ways the second downward leg is more

advanced on this measure, as prices have already reversed all of the previous

rebound and fallen to a new cycle low. The Case-Shiller index would need to fall

by only a further 1.2% to reach that mark. At the current rate of decline, that

would happen by February.